Sea Limited stock is drawing attention as the Singapore-based internet services company is scheduled to report fourth-quarter 2024 results before the US market opens on Tuesday, March 4. Shares have gained about 20% as of Mar 2 this year.

Key Factors to Note Ahead of Q4 Results

Q4 Revenue is Expected to Increase 29% YoY

According to Bloomberg’s unanimous expectations, Sea Ltd to post to report a 29% increase in revenue to $4.66 billion from $3.62 billion a year ago; Adjusted EPS is estimated to be $0.72, swings to profit YoY.

Sea Limited is expected to have benefited from a strong e-commerce performance despite a highly competitive environment, maintaining its mid-20% GMV growth guidance for the year.

The holiday season, a key online shopping demand driver, likely boosted Shopee’s GMV and revenues. This continued momentum is anticipated to have strengthened the company’s performance in the to-be-reported quarter.

In the third quarter of 2024, Shopee achieved a positive adjusted EBITDA in both Asia and Brazil, highlighting its strong financial performance. With a continued focus on sustainable growth, the platform is likely to have continued gaining.

Profit To Expand Further On Recovery In Game-Publishing Business

Sea's profit is set to expand further as recovery in its game-publishing business adds to bottom-line improvement at its e-commerce unit Shopee, which met expectations by breaking even in 3Q on anadjusted Ebitda basis.

A strong player base in its Free Fire game, which drives about 70% of mobile game revenue, according to Sensor Tower, might push digital entertainment segment bookings 20%-30% higher sequentially in 4Q vs. 3Q's 3.7%, along with growth in active players, based on Sensor Tower data.

A shift toward a local marketplace model and in-house logistics bode well for advertising sales, strengthening the bottom line at its Brazil e-commerce unit. An additional profit boost could come from financial services as it makes larger loans to high quality borrowers.

Analysts Expect Double-Digit Growth in the Next Few Years

When looking at the e-commerce market, which is extremely important for Sea Limited as it is generating the biggest part of revenue, we see different studies expecting rather high growth rates. When looking at the entire Asia-Pacific region, eMarketer is expecting retail e-commerce sales to grow in the mid-to-high single digits in the years to come.

For the next few years, the video game market in Southeast Asia is expected to grow with a solid pace – between 2024 and 2027 a CAGR of 7.8% is expected.

Overall, analysts are very optimistic and at least for the next two years expected growth rates are very high. In fiscal 2025, EPS growth is estimated to be 82% and in fiscal 2026 the bottom line is expected to grow 29%. Additionally, analysts are getting more and more optimistic and raise estimates for revenue in the last few quarters, which is a good sign.

Options Strategies to Trade Sea’s Earnings

Given Sea’s elevated implied volatility (67.91%), earnings are likely to trigger significant price swings. Below are actionable strategies based on real-time options data:

1. Bull Call Spread

Structure:

• Sell 135 Call | Buy 125 Call

  $SE Vertical 250307 125.0C/135.0C$

• Breakeven: $128.9

• Max Profit: $610

• Max Loss: -$390

  

2. Bear Put Spread (If Bearish)

• Buy $130 Put (OTM) | Sell $120 Put (OTM)

  $SE Vertical 250307 120.0P/130.0P$

• Lower premium compared to a naked put

• Max Profit: $562.5

• Max Loss: -$437.5

• Breakeven: $125.62